A Very Unrealistic Market
The News Herald reports from Florida. “Bay County’s foreclosure rate is among the top third of 67 counties in Florida— a state that ranks No. 3 in the nation for foreclosures, according to the state Agency for Workforce Innovation. The county court system is flooded with foreclosures, deputy clerk Virginia Starling said. ‘We have them coming in box loads — that’s not including what comes in the mail,’ Starling said.”
“Lindsay Hall, 68, is among thousands of Bay County property owners stuck in homes worth less than they owe and facing foreclosure. Hall is about to lose her two-bedroom cottage to foreclosure. ‘At my age, I can’t be on the street,’ Hall said.”
The Press & Guide. “City officials say they’re ready to put Dearborn Towers on the market after receiving the last of three appraisals for the Florida property earlier this year. The most recent appraisal put the value at $2,8 million, with the current restriction-limiting residency to people from Dearborn. However, if that restriction was dropped by new owners and rents raised comparable to those of surrounding buildings, it would be valued at $5.8 million. The first appraisal, submitted in March 2008, estimated the then-current market value of the 78,560 square foot property at about $5.6 million.”
“That’s a far cry the property’s estimated value in 2007, which was between $8 million and $8.3 million according to an informal appraisal.”
“According to a 2010 appraisal performed by Integra Realty Resources of Tampa Bay, the populations of both Clearwater (Pinellas County) and the state of Florida were anticipated to increase by an average annual compound rate of 1.04 percent and 2.02 percent, respectively, for the period between 2009 and 2019. ‘That means people are still coming to Florida, they’re just renting more now,’ said Dearborn Mayor Jack O’Reilly.”
The Sunday Business Post. “Irish investors, including well-known names in the business world, could lose up to $90million they invested in the buyout of a hotel on the Sawgrass golf course in Florida. About 100 investors, mainly high-net worth individuals, were involved in the $220 million buyout of the Sawgrass Marriott Golf Resort & Spa at the height of the boom in July 2006.”
“The investors put up about $90 million in equity and the remainder was funded with debt from the commercial lending division of Goldman Sachs in the US. Following the buyout, they borrowed a further $30 million to invest in upgrading the 65-acre resort. At the time, investors were told they could expect to make a 2.5 times return on their investment by selling or refinancing the resort by 2009.”
“However, the resort was last week granted Chapter 11 protection by a bankruptcy court in Florida after Goldman Sachs moved to take control of the property. It had not received payments on the outstanding $193 million in debt since last August. One investor described its difficulties as ‘a balance sheet issue, and not an operating issue’ and said that there was long-term value in the resort, which has planning permission for 500 more housing units.”
“‘The best outcome is that a third-party investor comes in to work with Goldman and with us to make sure it comes out of Chapter 11 and keeps trading,’ said one investor. He acknowledged that the Irish investors could see much of their investment wiped out.”
The Orlando Sentinel. “Two years after swallowing the troubled mortgage giant Countrywide Financial, Bank of America trails other major U.S. lenders in resolving troubled home loans through short sales or modified loan terms. Clermont resident George Simmons said he is now totally frustrated, having tried for more than a year to get Bank of America to convert a series of trial modifications into something permanent.”
“‘Let’s see, the last correspondence I had from them said they didn’t have my income-tax return and my Social Security records,’ Simmons said. ‘I sent it to them so many times. I’ve got my fax receipts and my certified postal receipts. They just keep asking for the same paperwork over and over and over again.’”
The Tampa Tribune. “Pasco County’s taxable property value will continue to decline in 2010-11, by 11 percent, according to estimates released Friday by the property appraiser’s office. ‘We’ve seen the bottom just fall right out’ of the housing market, Property Appraiser Mike Wells said Friday. ‘People were buying houses that had no business buying a house. It’s not their fault. Everybody wants to own a home. It’s a mess, but it’s going to right itself.’”
“Just not in the next fiscal year, or the one after it, Wells predicted. ‘The Save Our Homes (property tax amendment) is practically nil now because we’re in a declining market,’ Wells said. ‘For 2011, residential (property values) will probably go down a point or two, but it’s about hit the bottom. I don’t think we’ll see a rise in value for some time. There are too many houses for sale.’”
The Sun Sentinel. “Coral Springs and Parkland have a significant number of homes in foreclosure, but Colleen Stobinsky, managing broker of the Coral Springs Prudential Florida Realty office, believes the future is not all gloomy. ‘The outlook is far more positive for the two cities compared to some of their neighbors who are experiencing much higher numbers and a slower rate of sales,’ Stobinsky said. ‘This is because of the greater demand for homes in Coral Springs and Parkland.’”
“Q: For someone looking to buy a home, is this a good time to buy? A: It is an excellent time to buy; home prices are now more affordable and interest rates are at all time lows. You also have the tax credit for first time buyers.”
“Q: Do you think house prices are ever going to appreciate the way it did from 2002 to 2007? A: I do not think we will see home prices increase like they did in 2002 to 2007; that was a very unrealistic market. But the real estate market will come back, it always does.”
The News Press. “To buy or rent? For many people, that is a question they consider when it comes to housing. But thanks to a tax credit for home buyers passed by Congress in 2008 that has been extended and amended twice, that decision has been a little easier for some.”
“Realtor Bob Oxnard said he expects people will be rushing to finalize deals by April 30. ‘I think April will be the biggest month of the year in terms of homes going under contract, or ‘pending sale,’ Oxnard said. ‘I am already hearing that some people are abandoning contracts on short sales since they are not sure they can be accepted by April 30.’”
“In Southwest Florida, Scott Gasparini and Kim LaMantia are among those who have taken advantage of the credit. ‘The tax credit is the No. 1 factor for why I bought a house,’ said Gasparini, 27, who moved to the area about a year ago from Connecticut and closed on a three-bedroom, two-bath single-family residence last month in the Cypress Pointe neighborhood.”
“Gasparini, who started exploring for homes last September, said he didn’t know the details about the tax credit at the time. But then his Realtor showed him how he could buy. ‘At first, I really didn’t know the details,’ he said. ‘But by December, I decided I wanted to buy and the tax credit, 8,000 free dollars, was the main reason.’”
“One concern about the tax credit is whether there will be a significant market slowdown once the program ends. Oxnard said he was doubtful about that.”
“‘I think all of us will be too busy in May to decide if the market is slowing dramatically, and we typically get an uptick in the real estate business in June since it is such a busy real estate month nationwide,’ he said. ‘I believe the whole real estate market is getting better because of fundamentals like reduced supply and lower prices. … I think people will realize the bottom is past and will lose the reluctance to commit.’”
The Marco News. “Several Marco Island City Council members proposed that the Code Enforcement Board have the power to reduce fines if a property is out of compliance, particularly when code fines on the foreclosure property are so expensive that no one will purchase the growing liability and fix the problems. Lowering fines before problems are fixed won’t work and time will be wasted negotiating with non-committal owners, some code board members have said.”
“Members of the code board declined the power that City Council Vice Chairman Frank Recker proposed they have on Monday. ‘I was baffled and shocked when he (Code Board Chairman Tarik Ayasun) said he didn’t want it,’ Recker said.”
“Proponents of the change in policy say it’s the only way to remove a stalemate in selling foreclosed homes. Marco resident Charlie Vollmer lives next door to a rat-infested abandoned property on a street peppered with homes worth nearly $1 million, according to Collier County Property Appraiser records. He thinks lowering the fines for the home at 266 Seminole Ct. may be the only way to protect the city and neighboring properties from a failing seawall.”
“‘My property is eroding into the canal… It’s falling into the drink,’ Vollmer said.”
“Most people won’t fix a property until they own it and the fines are too high to encourage a buyer, he added. The code fines on the home are about $270,000 and accruing at a rate of $500 per day, including a $250 per day fine for failure to connect to the sewer system and the $250 per day fine for the fallen seawall, reported Chief of Code Compliance Eric Wardle. Andrew Delgado of Premier Plus Realty listed the house for sale at $299,000.”
“Homeowner Lazaro Carret was first cited for the seawall failure in February 2007. Carret purchased the home in 2006 for $600,000 and couldn’t afford the repair, he reportedly told code officers. ‘He just threw away the keys,’ says Vollmer.”
“Carret owns another home on Bald Ealge Drive purchased for about $750,000 in 2007, according to the Collier County Property Appraiser. Ayasun said lack of owners’ responsibility was among the reasons he didn’t want to reduce fines in foreclosure cases. ‘It just continues to add time because the people who come before us aren’t taking ownership anyway,’ he said.”
“A cash buyer was willing to pay the city 10 percent of the code fine, fix the seawall at a cost of $18,000 and pay the sewer assessment of about $20,000, Delgado said. That buyer is going to move onto other opportunities now, he added. ‘We’re at a four-way stop and nobody wants to move. Beautification and economic stimulus are being stifled by a poorly written code. You can call the owner a crook, a bad guy… It doesn’t matter, we’re all getting hurt by this. They’re not punishing the original owners, the deadbeats.’”
And then there’s this idiot:
http://www.news-press.com/article/20100308/NEWS0110/3080347
One of my favorite bubble stories ever! Must be pretty lonely in there.
No mention of association fees in article. That could get real interesting. This guy is living in a “Life-After-People” scenario with birds being his first new room-mates.
That story is just missing Will Smith, golf balls, a fighter jet, and zombies coming out at night.
A New Jersey firefighter buys a $430k vacation condo… I don’t know whether to be more concerned about the stupidity of the buyer or the stupidity of his employers for overpaying on union contracts.
I do not think he is necessarily an idiot. He has a lawsuit going, and I am sure he is using it as a bargaining chip.
‘Lindsay Hall, 68, is among thousands of Bay County property owners stuck in homes worth less than they owe and facing foreclosure.
Worth less than they owe, this is the crucial point. How did she end up like this? A refi? If so, where’s the loot? It’s hard to imagine she bought the place in the past few years,, and even if she did, bad move on her part.
‘At my age, I can’t be on the street’ …Well, boo-hoo; go get a rental, and you won’t be “on the street.”
“Worth less than they owe, this is the crucial point. How did she end up like this? A refi?”
The LL tried to get me to buy the house I had been renting in 2008 for $300,000.00 telling me they would not make a dime on it. I knew they had over paid at $260,000.00 and refied it to 300k. But I guess that 40k didn`t count. I moved out last week and the place I moved into as a rental was for sale at $290,000.00 and same thing, they didn`t want to make anything, just get ou tof it. Problem is they paid !50,000.00 in 94, so I guess this 140k that they took ouy doesn`t count either.
My guess is that even if they were able to sell the place for $350K, they still wouldn’t come out ahead after considering the mortgage interest they’ve paid.
Assuming it wasn’t an IO loan.
Well, Ben, she SPENT the refi money.
The ATM money:
Cars
Toys
New “bizness” i.e. nail salon, dog sitting
blew it at a casino
Here’s my candidate for HBB quote of the week from Mike Wells, the Property Appraiser of Pasco County: “People were buying houses that had no business buying a house. It’s not their fault.”
What?
Yea, this is my quote of the week too. Whose fault is it then?
“The system”
Nobody is guilty, we are all victims these days. You just have to love the new attitude in the good ol’ USA.
It’s at every level…I hate it when someone at work says “oh no, don’t blame yourself! it’s not about blame! no one’s pointing the finger here, blah blah.”
I’ll bloody will blame myself if it’s my fault and you can STFU.
‘we are all victims these days’
Well, that might work on daytime TV, but in the real world, not so much. This issue is too serious and large to powder puff it. All manias are driven by greed. Once we accept that the housing bubble was greed based, much of this crying should stop.
IMO, this is where the government makes things much worse. The other day I was listening to Paulson defend his bank deals. He made it sound like he did us all a favor! Basically, “You would have lost your jobs if not for me!”
‘Too big to fail’ is government sanctioned extortion, (or a GS myth, take your choice). A lot of chickens are coming home to roost with this housing bust, and this country better wise up, IMO.
No truer words said Ben Jones .
And yes I just love the Paulson we saved the World BS .More like they were able to pick and choose who would be bailed out and
save Wall Streets bogus jobs and liability and keep the casinos in tack . What about all the other Main Street jobs that weren’t saved Mr Paulson .
I can’t believe they didn’t make a call that this was one of the biggest RE mania’s in History and forget about trying to prop up that which was fake .
They did figure it out. A little late, but not as late as they try to make everyone think they did. GS was hedged. Hedged with CDSs at a firm that couldn’t back them, but hedged none the less.
And they were still securitizing the paper and selling the bonds to their customers while they were hedging their own holdings and hoping that AIG would be considered too big to fail. If they hadn’t had the CDSs to fall back on, they would have had to try to dump the bonds and someone would have noticed (they might even have been required to disclose it - not sure about the details of those particular securities regulations). Since the CDSs aren’t traded on a regulated exchange, they got to keep the whole thing quiet.
Miserable b-stards.
You folks do realize that you are blaspheming Gollum, don’t you?
Polly ,they are miserable b-stards . I agree and have stated many times in posts that I saw them sitting up the bail-outs over a year ahead of time . So,the FIRE call was so bogus .There would be no reason to let unregulated investment houses and Insurance Companies come to the discount window for months ,based on junk paper, if they weren’t biding their time until they could set the bail outs up . But when you look at how Congress went along with this ,not even asking the right questions ,it was just acts of bought off traitors .
And look at the crap they pulled after they got the money with total immunity . I call it Obstruction of Justice when you contrive a bail-out so you prevent discovery of foul play . Really ,I have never seen anything like it .I think it was one of the most depressing things that I have ever witnessed .The American people are on to them in spite of the PR campaign of they saved the World . IMHO of course .
My gig is that it wasn’t the most effective way to handle the problem ,and it kept the corrupt systems in place and it
penalized the wrong parties . I also hate it when they try to change standing law after the fact because this screwed up confidence in a system and the rule of law and contracts .
Same attitude as the banks, Wall St Boys. Get it while you can. No differance!
Yee-gawds!
I think I’ve regaled you enough times with the Story Of How I Bruised My Ribs. In short, I did this while leaning on the side of my bathtub while fixing one of the faucets.
The System did not make my bruise my ribs. I did it and it’s my fault. And I could have prevented the problem by not leaning on the side of the tub while fixing said faucet.
Did the bathtub have airbags? Probably not - sue the manufacturer.
What about the faucet? - why was it installed where it was making you lean over the non-airbag equipped tub - sue the maker of the faucet, and whoever built the house.
Were you using a wrench? sue the wrench maker too.
Who was President when the tub was installed? sue them too.
Was there a warning sticker indicating that leaning against the tub could bruise ribs - you have yourself a lawsuit! We’re all victims and it is never our fault.
Are you a lawyer? I walked into a wall without a warning sign today breaking my nose. Perhaps i could sue the drywall makers for making their product too hard …
Just kidding about the nose, but I hear these kind of stupid lawsuits all the time. These are frivolous. Lawsuits against doctors who could care less about their patients and make stupid mistakes or decisions based on greed are NOT frivolous.
Any disclaimer in the water bill about hard water, damage to plumbing, etc.?
Between the bathtubs and bikes, we worry about you Slim.
‘I believe the whole real estate market is getting better because of fundamentals like reduced supply and lower prices. … I think people will realize the bottom is past and will lose the reluctance to commit.’
Jupiter, Mars, where do these people live?
Tell it to this guy:
‘My property is eroding into the canal… It’s falling into the drink’
Do you suppose he cares if ‘the bottom is past’? There are so many issues with owning property in a place with so many foreclosures, that picking some magical “bottom” doesn’t mean that much. What about the HOA? The roads, the drywall, the economy? IMO, UHS would be better off getting out of the prediction biz.
It’s not even hooked up to a sewer!
Even the houses in Detroit that have holes in the roof and torn-out electricals at least are hooked up to a sewer.
UHS should leave the predicting to the economists. With the one hand and the other one, they are twice as likely to predict right, compared to the one-handed, stopped clock UHS prediction that “real estate always goes up, in the long run.”
Reminds me of the old sayin’ _
“The only thing you get from picking bottoms….
….. is a stinky finger”
Ben, you missed the best one! From today’s St. Pete Times, on the auction of the condos at “Signature Place”:
_________________________________
Bridget Donovan had little interest in owning a unit in St. Petersburg’s Signature Place condo tower.
But half a million dollars and two celebratory glasses of red wine later, Donovan and her husband, George, owned a 22nd-story, 1,829-square-foot condo overlooking Tampa Bay.
…
Young women in business skirts escorted winners into a “closing room” to seal deals with bubbling champagne flutes. Platters of shrimp cocktail, cubed cheeses and fresh fruit served as appetizers for the main action in the auction room.
Donovan likened herself to a crack addict after she breached her not-a-penny-more maximum price by $100,000.
“I didn’t know I could be led so easily,” the Fort Lauderdale resident said. “It wasn’t like we wanted the unit. But we didn’t want the others to have it.”
http://tinyurl.com/yeoorct
Thanks, it’s hard to cover all the bases in a state the size of Florida.
Idiots like this are one reason I’m losing patience with how the media and government are handling all this. Whining, “oh, poor baby, you’ve lost your house.” And at the same time, “you evil bankers and speculators!”
Well, which is it? Like the first lady in the post, it’s likely SHE SOLD HER FREAKING HOUSE TO THE BANK! And she probably got top dollar for it! I’m no sap of the lenders, but don’t the people they represent deserve to at least collect a few pennies on the dollar?
And then there are the houses I see; trashed out, appliances gone. Why the boo-hooing for these FBs?
There’s “plenty of blame to go around” (probably the housing bubble theme, at this point), but until we start looking at this massive situation for what it is, our policy response will suck eggs.
One of the comments from the comment section stated that the condo fess were $600 a month . I just wonder what that gets you .
The things required for me to consider a $600 monthly association fee cannot be posted on this blog.
You mean like the apartment on Soylent Green that came with a girl?
Actually, $600 a month fees on this kind of condo is pretty modest. If so they may be scimping badly on the maintenance fund.
“It wasn’t like we wanted the unit. But we didn’t want the others to have it.”
Greed, hoarding, beating the Joneses: All the best human faults made possible by our government and those performing god’s work.
That piece of trash really said that? What a horrible person. In her spare time she probably intends to throw puppies off the balcony when she is not berating her husband because he asked her to try to hold together some sense of compassion and humanity, and not always be so B’ey.
Unfortunately I just got the mental picture of those puppies going off the balcony. Just despicable!
You see, Ben, the “Government”, “The People”, “The Big Bankers”, etc. are only comprised of human beings. Greed, being a common human trait, crosses the boundaries of all those groups, and can feed into each other.
Greedy people wanting “free money” tax breaks & other freebies feed into a government willing to give those and so on and so forth feeding into a vicious downward spiral.
Unsustainable.
Ben,
Yes. She did sell her house to the bank. I understand if someone looses a job or gets sick and they have financial problems.
There was an interview on NPR this morning about a lady who bought her house in 1980, refi’ed it to death, and then is wondering why she is getting evicted.
What is even worse, when this stuff comes to its natural conclusion, the people who had no say nor anything to do with the situation will suffer. The neighbors, children, taxpayers, tenants, etc. will be the ones who suffer for a FB foolishness.
Roidy
ACH,
I’ve mentioned at length about how I’ll go to foreclosed houses and eventually some neighbors will come talk to me. They are often seriously bummed out, with the overgrown yard and the trash etc. They usually offer something like, “ol’ Mike was a good guy,” as if the former owner is deceased.
Because of course renting = death. Only slightly more extreeme than the foreclosed = homeless meme that the media keeps giving us.
“I didn’t know I could be led so easily,” the Fort Lauderdale resident said. “It wasn’t like we wanted the unit. But we didn’t want the others to have it.”
Maybe this is what Mike Wells, the Property Appraiser of Pasco County meant when he said: “People were buying houses that had no business buying a house. It’s not their fault.”
I mean really who could resist a pile of shrimp and cut-up cheese? Wouldn’t that make most people decide to overpay by $100,000 on a condo that they didn’t want?
I’ll only cave for a platter of shrimp if they are steamed and covered in old bay.
Bawlamoron!
I’m with ya.
Forget the shrimp and cheese.
My lady would have me on a short kiddie wrist leash and would be aiming her Tazergun with …
‘Young women in business skirts escorted winners into a “closing room” to seal deals with bubbling champagne flutes”
Come to think of it, that does sound a lot like a strip club.
Oh how do you think they got these jerks to buy during the housing boom . I use to go to some of those stupid eat feasts
just to get the food and check out the crazy prices . We had a poster who got conned into buying a unit in a condo project during the boom who described the whole process by which they used all the psychological tricks that made the people think they had just won the lottery .Driving people up to sites in buses
with everybody panting to be put on the list after they are served some brew .
All those fake investment classes that were set up by builders or the Real Estate sales people ,while they all chanted the myths ” you can’t lose” and “real estate always goes up” ,”make leverage work for you “. All the builders special lender programed to get people who couldn’t afford it into the investment . Magazines and Main Street Media publishing articles on the next great real estate location to invest in .Lenders calling people or sending out mail urging people to refinance and make the house work for them to make their dreams come true and use leverage by some toxic loan that had low payments only for a little while.
The real kicker was when people were mad-hatters trying to outbid each other on some overpriced house and this drove the price up more . Than add all the fraud, including cash back fraud and bogus incentives that drove up the prices and it was one big crazy greed Mania all right .
Oh I forgot about the flippers and all the programs on TV that
made flipping and doing a few fix ups the next great money opportunity of the century .It worked for a while for some people until the market crashed . Also ,if you didn’t take out a equity loan to put another 75 thousand into your kitchen and bathrooms in a 100k neighborhood ,your were just not in style .
The most damage came from the shows where they put a fresh coat of paint on the walls and stainless steel appliances to flip for $100K in profit. Anyone with half a brain had to know that couldn’t last.
The problem also — those realtors ACTUALLY believed that real estate always goes up. Most of them were not the sharpest tool in the shed and they saw no end to prices going up and up and up.
at least they kiss ya before they royally violate you .
She’s only just now finding out that she’s an idiot? Somehow I’m guessing that if we went through her closets we’d find a bunch of “seemed like a good idea at the time,” stuff. Now whether that’s hobby gear or handbags I have no idea but somebody dumb enough to spend 100k more than she wanted to is probably dumb enough to spend $100 more than she wanted.
And I’m thinking there’s still money to be made here. After all, she can’t move old furniture into a new condo.
Im thinking about going to the homeless shelter and pig out tonight. I don’t really want the food, I just dont want someone else to eat.
What kind of person are you, that $25 in shrimp and cheese can’t convice you to spend hundreds of thousands of dollars? A robot?
What.. An.. Idiot. And just has the look of a harpy wife (Suzanne?), bidding like an idiot at this thing, going 100K over her price..
I feel a little sick after reading that article.
http://www.bcpa.net/RecInfo.asp?URL_Folio=484317020230
Also, in case anyone cares. Good ol’Bridget is already about 1M dollars under her home in Broward county. She bought it for 2.4M in 2004, it’s now assessed at 1.4M.
This lady just can’t stop making bad RE deals, can she?
At least the house in FLL is in a good area, even if they are 1M dollars underwater on it!
It appears that the supply of Greater Fools on FL has not run out yet. I’m not sure who is the GF: Her, or the people lending her the $$$ to bid on that condo?
the people lending the $$$. are the greater fools.
I’m going to make a very sexist comment here, but women are very emotional by nature. That makes an auction a really bad place for them to purchase a home.
Men are very competitive by nature. That makes an auction a really bad place for them to purchase a home.
~~ Just had to even up the sexist remarks this lovely Monday.
OK, remember when we first heard about builder auctions, with people in tuxedos running up and down the aisles cheering and escorting the “winners” off to close? Or the foreclosure tours? Or the raffles and essay contests? I don’t think con-artists or suckers are limited to any one group.
The winner of an auction has just been told that no one else is stupid enough to pay what
he did. Should make you feel good.
Ben, I just thought about all that hype and posted above about it also .
People love to be made to feel “special”, or a “VIP”.
Hence there are a never ending pool of suckers to draw from.
‘People love to be made to feel “special”, or a “VIP”.’
Especially Senators (e.g. Dodd)…
I’m reminded of my speculation from years ago wondering how the housing bubble would be different from the dot com bubble since, in general, house purchase decisions are made by women, and stock purchase decisions are made by men.
Who is the biggest “DA” here?
Me, Number 211, with the runner-up my husband.
In the Herald-Tribune article, Commenter Keepinmind wrote
“A search of the official court records in Bay County reveals Ethel Lindsay Hall first got a loan on her property for $51,500 on 5/7/02. The original loan was satisfied on 2/8/05. On 9/9/05, a new loan was created for $205,000 on the same property. “
Thanks Bill for doing the work that a real reporter should have done.
Note to Scarlet Sims: when you went to journalism school, didn’t they tell you the basics of Who, What, When, Where, and Why? You forgot the Why. Why is Ethel losing her home? Because she spent too much of the bank’s money and now they want it back.
“I didn’t know I could be led so easily,” the Fort Lauderdale resident said. “It wasn’t like we wanted the unit. But we didn’t want the others to have it.”
Good Lord, these people actually exist, six year old
mentalities in a mature body and then, heaven help
us, they breed.
You can tell from the tone of the article that even the reporter was disgusted. The story comes complete with a photo of Ms. Donovan waving her auction paddle.
In other news, I have to comment on this: “According to a 2010 appraisal performed by Integra Realty Resources of Tampa Bay, the populations of both Clearwater (Pinellas County) and the state of Florida were anticipated to increase by an average annual compound rate of 1.04 percent and 2.02 percent, respectively, for the period between 2009 and 2019.”
Hiring a realty firm to run statistics is almost guaranteed to support a preordained conclusion. It’s like the economic impact studies that get trotted out by owners of professional sports teams trying to get the public to build them stadiums.
Even if that pop increase was a given (and it’s not because it’s a “study” by a shill group), that’s STILL not enough to fill all the empty real estate.
BTW, there is an important article on condos and lenders in the Miami Herald. But I couldn’t get past the “free” subscription page.
(Note to newspaper/websites: I already let you guys put a cookie on my hard drive. Subjecting me to your janky sign up page is asking too much.)
Ben, thanks again for trying to filter as much of the BS as you can.
http://tinyurl.com/desperatecondo
Desperate condo, homeowner associations thrown a lifeline
BY RACHAEL LEE COLEMAN
rcoleman@MiamiHerald.com
Posted on Sun, Mar. 07, 2010
Revenue-starved condominium and homeowners associations struggling to keep the taps running and the lawns mowed have found a novel way to squeeze money from units that don’t pay what they owe.
It’s called a reverse foreclosure, a tool that can force banks to pay association maintenance fees when unit owners don’t.
It’s a way for associations to halt the decline that begins when one owner quits paying maintenance fees, followed by another, then another, forcing a reduction in general maintenance, driving down property values even more, and leaving a community riddled with vacancies and vandalism.
Also, it’s a way for associations to stick it to banks — who they are convinced have been sticking it to them since the real estate meltdown began.
Banks, for their part, deny any dishonorable intent and say they are just protecting their interests, as any prudent business would do.
Here’s how a reverse foreclosure works: When a home or condominium owner stops paying the mortgage, the bank files a notice of foreclosure to safeguard its stake. After that, some banks deliberately delay the process of taking back the property.
They take their time because, if it’s like most South Florida properties, the delinquent unit is worth less than the outstanding mortgage. In the lingo of the trade, such units are “upside-down.”
Banks are in no rush to have upside-down properties on their books.
Delaying foreclosure can be a nightmare for homeowner and condo associations. When people stop paying the mortgage, they invariably stop paying their maintenance fees. As long as a foreclosure is in limbo — and the process can take years if a bank wants to slow things down, associations say — unpaid maintenance fees pile up.
Under a reverse foreclosure, the association files its own foreclosure notice and takes title, which is its right after the homeowner stops paying maintenance fees. The association can’t sell because of the bank’s lien. But it can renounce its claim on the property in court and ask the judge to give the title back to the bank.
Then the bank has to pay the fees.
It’s a hardball tactic, but condo and homeowner associations say they have been forced to resort to it because the Legislature, beholden to lenders and their lobbyists, refuses to make the banks take over the units and cover the unpaid bills.
Although reverse foreclosure is a new concept, it could become very popular very quickly. In a recent survey, 60 percent of Florida condo and homeowner associations reported that half of their units were two months behind in paying maintenance fees.
When unpaid fees become an epidemic, associations sometimes have to charge “special assessments” to owners in good standing to make up for lost revenue and cover the cost of utilities, upkeep and insurance.
Special assessments cause fierce neighbor-vs.-neighbor resentment, and can trigger a domino effect — even more units sliding into default.
“These legal strategies are a direct response to the fact that the laws haven’t changed,” said Ben Solomon, an attorney with Association Law Group. In January, he engineered the state’s first reverse foreclosure, on behalf of Keys Gate, a master-planned community in Homestead.
Although a reverse foreclosure sticks a bank with a property it doesn’t want, Florida law gives the lender a break on the outstanding bill. Under existing statutes, banks cannot be forced to pay more than 12 months of past-due homeowner association fees or 1 percent of the overall mortgage amount, whichever is less. In the case of condos, the cap is six months.
The remainder, tens of thousands of dollars in some instances, is written off as bad debt by the association.
Because of the cap, said Solomon, “there is no incentive for banks to foreclose” in a timely fashion.
The Keys Gate Community Association, which represents 3,100 families, foreclosed on a four-bedroom home in April 2007 after its owner stopped paying monthly maintenance fees. The lender, HSBC Bank USA, filed its own notice to foreclose two months later, but didn’t follow through, sticking the association with an empty house and, ultimately, $5,320 in unpaid fees tallied over two and a half years.
Fed up, the association cooked up the reverse foreclosure gambit.
On Jan. 12, Miami-Dade Circuit Judge Jerald Bagley bestowed his blessing, making the bank liable not only for association fees, but legal fees, court costs and taxes.
Because of the cap, the association had to eat $3,819 of the $5,320 tab.
HSBC’s attorneys did not return calls for comment.
Keys Gate is now moving to reverse foreclose on 13 other delinquent homes.
Howard Lax, a Bloomfield Hills, Mich., attorney who represents banks, mortgage companies and real estate brokers, said it is understandable that lenders are in no hurry to take back delinquent units, only to have to turn around and sell them amid a market that has crashed.
“If the bank can’t sell what they already have on the market, it makes little sense to put more on the market,” he said.
Added Alex Sanchez, president and CEO of the Florida Bankers Association: “We get hit from every side. Some people say we’re foreclosing too fast; others say we’re foreclosing too slow. Bankers want to keep Florida families in their homes. Foreclosure is a last remedy.”
In the meantime, Donna Berger, managing partner of the firm Katzman, Garfinkel, Rosenbaum and executive director of the Community Advocacy Network, recommends that associations recoup their losses by renting out units they take by foreclosure.
“If you already own it, control it,” Berger said. “You don’t need to pay lawyers.”
Miami Beach City Commissioner Jerry Libbin, who is fighting for legislation that strips away the banks’ protections, called the court decree in the Keys Gate case “an important legal ruling for condo owners who are saddled with huge special assessments because greedy banks refused to take financial responsibility for their reckless lending.”
A number of new bills proposed for this legislative session could, in fact, offer associations some relief. One would turn the six-month cap on condo back-payments into a 12-month cap. Another would wipe out caps entirely.
“In the meantime, we’re trying to aggressively work within existing laws,” said Solomon. “There’s no time to spare and we can’t afford to wait.”
© 2010 Miami Herald Media Company. All Rights Reserved.
“In the meantime, Donna Berger, managing partner of the firm Katzman, Garfinkel, Rosenbaum and executive director of the Community Advocacy Network, recommends that associations recoup their losses by renting out units they take by foreclosure.
“If you already own it, control it,” Berger said. “You don’t need to pay lawyers.”
Not a bad idea. OTOH, people on association boards probably already have enough headaches and don’t want the landlording hassles.
Well it took me a minute to parse this. I don’t think that the HOAs are becomming landlords. Rather they’re getting a court to force the banks to take title after the HOA has foreclosed. And that’s what makes it a “reverse” foreclosure, the other party forceing the bank to take title.
Foreclosure Island:
My parents live on Marco Island and let me tell you that you could not find a more overbuilt, overpriced, faux-facade med-style, grandiose, ridiculously-sized speculator driven batch of second-homes in this country. Biggest bunch of snobby posers I have ever seen in one spot in my life. I want to barf every time I go there. (I almost never go there).
Marco Island is nothing more than a glorified piece of swamp. Incredible marketing, though.
I can remember my Florida-dwelling grandmother badmouthing Marco Island when I was a wee little Slim. That would be back in the 1960s, people.
Before air conditioning, suntan lotion and interstate highways, southwest Florida used to be entirely different — a sparsely populated, mosquito-ridden backwater where it was extremely difficult to eake out a living. Peter Matthiesen’s books (the “Killing Mr. Watson” trilogy), while fiction, do a great job giving a reader a sense of what it was like.
Marco Island is entirely dependent on people who are rich, retired, or snowbirds. In the future, we’re going to have a lot fewer people described by any of those adjectives.
I was a little slim in the 1960s myself. Now I’m way beyond a husky.
Hey, just want to say hello to the blog. Great to see it’s still going strong. I’ve been gone for awhile, sorry to hear about Olygal, she will be missed.
Well, look who’s back! The prodigal Palmy.
And we missed ya. Don’t be a stranger ’round here, okay?
Palmster, good to see you back. I actually had lunch a few weeks back at Mattison’s RIverside. I like your little corner of the world.
Welcome back Palmetto. We’ve missed your excellent posts. Hope you’re doing well.
Welcome back, Palmy! Good to see ya!
Welcome back Palmy. Yes, the loss of Olygal was super hard on everyone.
Well, it’s about time you returned. Hope everything is going well for you.
I miss Olygal very much.
I just got back today too. Greetings Palmy.
And here’s to remembering Olygal.
Seconded on the Oly remembrance.
Yo palmetto! How’s Florida? Welcome back!
Yes, it’s bad about Olygal. I miss her. There isn’t anyone that really appreciated a tiara like Oly…unless it was me. I like tiaras.
Roidy
Aw shucks, I love you guys, thanks for the welcome back. Can’t post as much as I’d like to these days, but I’m with ya!!
Hello Palmy .I was wondering about you . I still can’t believe Olygal is
gone ,its just so sad . Hope you will post .
I posted this late last night, but, uh, I, um, yeah, so, I am under contract on a house in Mid-Pinellas.
Okay, Muggy, I hereby appoint myself to be the official organizer of the HBB online housewarming party.
Now, who’s bringing the drinks? The munchies? A little birdie from the bayou told me that the NYC DJ will be providing a smokin’ hot set of Zydeco tunes, so we’re all set on the music front.
I’ll bring the ubiquitous plastic pink flamingo - no Florida home is complete without one.
What caliber bullet did you bite?
So, does this mean that the HBB online housewarming party will have to include a Schützenfest? If so, I’m bringing Ole Bessie. She’s been feeling a bit neglected of late.
I hope that you poked the ground real good with a sharp pointy stick.
We don’t want you don’t want you buying a sinkhole !
Congratulations to you and your family Muggy. I wish you all the best.
After a few more stories like this, it will be time to organize
thehousingbuyersblog dot com.
Congrats!… Is it one of the two you were bidding on?
Anybody read Astrology here? Not to get too “out there” but the US is in the same astrological pattern it experienced during the revolutionary war. Kinda interesting that “tea parties” are now surfacing. Coincidence? I believe this housing bubble was the result of massive corruption at the highest level. The only way to fix it and get back on track is remove the thieves in power, prosecute them and put law-abiding citizens in charge. How did this happen? Never did I think the US was capable of such a massive MASSIVE level of collusion and crime. Fannie and Freddie need to be broken up and managed privately. But the extent of the problem is really incalculable. Greedy b@st@rds has existed since the beginning of time — but when did they take charge of this country? When did idiocy overrule common sense? For example, a 25k a year worker buying a 350k house — approved by a bank? To add more lunacy to the pot, we have to feel sorry for this moron/thief and “help” them afford this house or they will be “homeless”. I know I’m saying what everybody’s been saying for years here but this problem won’t be fixed unless law and order is restored and the criminals that created this mess prosecuted. I don’t see that happening.
What pattern are you referring to? A transit of the planet Pluto, perhaps?
No, no, no. It’s the moon in the seventh house and Jupiter has aligned with Mars, this is the dawning of the age of Aquarius.
a.k.a. The Age When Unicorns Candy-Crap…
When the moon is in the Seventh House
And Jupiter aligns with Mars
Then peace will guide the planets
And love will steer the stars
This is the dawning of the Age of Aquarius
Age of Aquarius
Aquarius! Aquarius!
Harmony and understanding
Sympathy and trust abounding
No more falsehoods or derisions
Golden living dreams of visions
Mystic crystal revelation
And the mind’s true liberation
Aquarius! Aquarius!
When the moon is in the Seventh House
And Jupiter aligns with Mars
Then peace will guide the planets
And love will steer the stars
This is the dawning of the Age of Aquarius
Age of Aquarius
Aquarius! Aquarius!
Yes. Pluto has made it all around the zodiac back to where it was during the American Revolution — opposing Cancer (which is the sign of the US). By the way, I bet the snarky comments were all from Taureans…
Well, Taurus does mean Bull….
Actually, Taurus is represented by the sign of the Bull. They are notoriously stubborn, conventional, materialistic, pragmatic, lover of food and anything else affecting the senses, and imho…close -minded.
I guess the fact that Pluto wasn’t discovered until the 20th century is irrelevant.
What’s Uranus opposing? (*snicker*) (Leo!)
Nope. Pisces here.
Hey man my wife makes 6k per annum, as an underemployed grocery clerk. NINJA loan cost her 7%, but they approved her for 312k loan! yes that is 50x income but we had 20% down so we did not have to disclose income.
We haven’t foreclosed yet(curmudgeons are saying to quit paying at this point, even my super old fashioned frugal living norweigian parents), but health insurance may actually be the final straw that makes us dunk our savings into a home for cash, now, rather than continuing with the mortgage.
Yeah its our fault for buying, not blaming anyone but have to consider keeping a roof over our kids heads. Being underemployed means my wife has plenty of time to volunteer and I have had time to spend with the kids too lately.
$1000/month premiums. $1000 deductible, for each member of our family of 4. 50% prescription coverage, but only the drugs they choose to cover. Cant change cuz I have had 4 back surgeries and wife has congenital heart defect and (now)thyroid cancer. So yeah we are going to pay our insurance before we pay our mortgage
Regence Blue cross wont/wouldn’t pay for:
1.One pre-approved neck surgery that later they claimed was experimental; cost to us was $48,000.
2. Nerve pain medication that works at $225 per month, they wont pay their 50% want me to switch to a drug I wouldn’t take for too long cuz it did not work, birth control they won’t pay either.
Our health care costs last year alone were well above 20k
Our income: 22k.
Our savings: fading faster than we are!
Mike in Bend …..Just want to say that I wish you and your wife well with the medical problems that you are facing .You have to do what you think is best for you and your family .
Mike,
God bless you…please have your wife check out the Natural Thyroid Hormone group on Yahoo. Those gals are amazing — more knowledgable than 99% of the docs and they are FREE. It is a support forum for women with thyroid problems..they know how to order the cheapest tests, give amazing medical advice, etc. The gals on that forum have suffered through it all.. thyroid cancer, hypothyroidism, poverty, etc etc. They have nearly saved me from the brink…a bad thyroid is *hell*. There is no worse suffering as far as I know…and I’ve been hospitalized 3 times for brutal back surgeries. So I feel for you too…
I’m wiinging it without insurance …the huge monthly premiums are way more than my out of pocket expenses. And I have some major health issues going on…Mainly crappy thyroid which is getting better!! thanks to these amazing women. Good luck to you ..
“What caliber bullet did you bite?”
.50 / Depleted Uranium
“The tax credit is the No. 1 factor for why I bought a house.” After all this mess buyers are still putting the sellers first. I guess he saw all the banks being shut down every Friday and read all those stories about people not being able to fund their retirement or the purchase of uneccesary toys, vacations, sports cars, etc. through grossly inflated housing prices, and felt that what really amounts to nothing more than taking out a 8k or more principal loan with interest, which repayment of such loan is tacked onto the mortgage, and handed in one lump sum to the seller in the form of a higher selling price at the closing table was the only appropriate thing to do.
How dare you question his wisdom.
“But by December, I decided I wanted to buy and the tax credit, 8,000 free dollars, was the main reason.”
Oh, I see.
I inadvertently half-watched part of the local Phoenix “news” yesterday. They spent ten minutes of airtime extolling the virtues of some water heater/washer/dryer tax credit that is supposed to kick in during April. They “interviewed” some local appliance shop owners/managers, who were just licking their lips for their portion of handouts. I can not wait to see the June update where they complain that the credit in April meant few sales for the next several months.
Recent conversation between Slim and other people at the Tucson edition of Green Drinks:
Others: You should have a solar water heater installed at your place, Slim.
Slim: Yeah, but it costs five thousand dollars!
Others: Well, you’ll get all sorts of tax credits and rebates. That’ll bring the cost down.
Slim: Yeah, but you still have to front out the money.
Others: You could get a loan.
Slim: I’m a pay as you go kinda gal. And I want what I’m paying out to be a lot less.
I also launched into a discourse on something that I call The Feelgood Tax. And that is the mucho-extra money that one is expected to pay in order to go green. I guess the bonus is that spending all that dinero is that you’re supposed to feel real good.
No one seemed to be moved by my discourse. Oh, well. I’m not spending the money on solar hot water heating until the installation price comes wa-a-ay down. Five thousand bucks to heat a container of water is too rich for my blood.
I would think a black barrel on the roof would suffice to heat water in most of AZ most of the year. Surely that’s not $5 grand, is it?
Especially when the “container” that said hot water is going into would happen to be a Bathtub…
Nobody on earth is more honest than a Kansan…
Monday, March 08, 2010
FDIC Chairman Questions Mortgage Interest Tax Deduction
By Mark Lieberman, Senior Economist
FOXBusiness
WASHINGTON–Federal Deposit Insurance Corporation Chairman Sheila Bair came close to the third rail of tax policies Monday, citing the federal tax deduction for mortgage interest as one of the causes of the nation’s banking crisis.
“This crisis is the culmination of a decades-long process where national policies have skewed economic activity, away from savings and toward consumption, away from investment in our industrial base and public infrastructure and toward housing, and away from the real sectors of our economy and toward the financial sector,” Bair told the National Association for Business Economics on the opening day of its two-day policy conference. “Examples of these policies include federal tax and credit subsidies for housing, a tax code that can unduly favor short-term profit, and implied government backstops for financial firms that have now, in many cases, been made explicit.”
Bair stopped short of calling for the repeal of the deduction, but added, “We must avoid policies that encourage such economic distortions.”
…
At least the U.S. is not the only country where very unrealistic markets are found:
The Financial Times
Is China ‘the mother of all bubbles’?
By Arthur Kroeber, managing director of Dragonomics Research & Advisory
Published: March 9 2010 04:00 | Last updated: March 9 2010 04:00
Is China a bubble? External market sentiment has gyrated wildly from one extreme, thinly supported opinion to another over the past year.
A year ago consensus held that China faced feeble growth and social revolt by an army of millions of laid-off workers. That turned out to be wrong. By mid-year consensus believed China’s spectacular growth would continue to accelerate. That is turning out wrong, too.
Now the flavour of the month, introduced by legendary short-seller Jim Chanos, is that China is “the mother of all bubbles”. Wrong again.
To the short-sellers, a cursory inspection of various indicators makes it “obvious” that China is a giant bubble. We agree that China’s economy suffers from many distortions and systemic mispricing of capital.
But the problem is that a lot of what goes on in China’s economy is non-obvious, especially to people who have not bothered to educate themselves on the unusual structure of China’s political economy.
The easiest way to understand this is to look at the property market. Pessimists note that China’s commercial and office markets are wildly overbuilt, and that house prices are far too high relative to household incomes. Therefore, prices must crash dramatically, with dire consequences for the economy.
The premises are true: the commercial and office markets are overbuilt, and house prices are too high relative to income. But the conclusions do not follow so straightforwardly.
In macroeconomic impact, the commercial and office markets are of marginal relevance since they account for only 20 per cent of real estate construction volume. They could collapse and remain in the doldrums for years without having a material impact on heavy industrial demand. Housing is the key driver.
But here a variety of hidden subsidies enable people to buy much pricier flats than their income alone would allow, and with little leverage. This helps to sustain rising house prices while reducing the chances of a leverage-fuelled banking collapse.
Roughly 80 per cent of China’s urban residents own their homes – an astonishing number for a country that only began to privatise its housing stock in 1998. In most Western countries, by comparison, average home-ownership rates are around 60 per cent.
The biggest driver of home ownership has been implicit government subsidies. One-third of home owners purchased their homes at subsidised rates from their work units during the initial housing reform programme.
So long as these hidden subsidies continue to have a market impact – and many Chinese urbanites flipping luxury homes today started with a small, government-subsidised apartment – house prices can continue to look strangely high.
Eventually – meaning over the next five years or so – prices will have to normalise, and new housing construction will need to reflect underlying demand from new, low-income urbanites, rather than the desire of the existing urban middle class to store their wealth.
…